5 Ways to Make Your Money Last

Forty-percent of Americans live above their means. Seventy percent of Americans live paycheck to paycheck. Hopefully the recession has taught Americans a valuable lesson – you have to live below your means and plan for the future. Many Americans spend their entire paycheck within a week of being paid. Other Americans are financially immature and buy whatever they want and think about the consequences later. The only way to survive the recession and survive any future financial crisis is to change your spending habits. Here are 6 ways to make your money last.

1. Reduce. Reduce your expenses and live below your means. Buy more needs vs. wants. Don't buy something if you can't afford it or if you can't pay off the credit card balance within 3 to 6 months. Save your money to buy the item later or use lay-a-way.

2. Budget. Stop using your credit cards and pay cash for everything. If you do not have enough money to pay for necessary expenses such as food, clothing, shelter, healthcare create a budget for yourself to determine your total monthly expenses and your total monthly income. Reevaluate your spending habits. Shop at discount stores, outlets, use coupons, carpool, etc. to find extra money which can be used to pay down debt.

3. Direct deposit. Stop cashing checks. Cashing checks at a check-cashing store costs on average anywhere from 1% to 5% of the amount of the check. If you do this each payday this is money that you giving away and could be using. Use direct deposit for free and save yourself some money.

4. Savings. You should have enough money saved to pay at least 6-9 months worth of bills. Open a high interest online savings account such as Emigrant Direct or the ING Orange Account which earns you on average 2 to 3% interest on your money. Then develop long-term savings goals such as planning for retirement, college education, homeownership, etc.

5. Seek Help. Talk to friends, relatives or neighbors who have gone through similar situations. Go to the library or do research on the internet for various ways to reduce expenses, gain new skills, and shop on a budget. Some great websites are Budget Dial or The Stretcher. Some grocery stores such as Whole Food teach classes on how to shop on a budget.

If you want to make your money stretch you have to change your mindset. Watch financial shows on television or check out books at the library on personal finance, financial empowerment and other topics to help make your money last longer.